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The Role of Cryptocurrency in Crime: Money Laundering

There have been numerous allegations regarding Bitcoin and cryptocurrencies being used for nefarious activities. Making any of these charges stick has been a bit more difficult than anticipated, although there are some key statistics which all users need to be aware of. Turning illicitly obtained funds into ‘legal’ currency is a very difficult process these days.

Bitcoin and Money Laundering in a Nutshell

According to various reports, Bitcoin and other cryptocurrencies are regularly used to launder criminal proceeds. It is not necessarily easy to do so, as Bitcoin and all other cryptocurrency markets remain very small in terms of liquidity. Despite being multi-billion dollar markets, a maximum of 4% of criminal proceeds in Europe are laundered using cryptocurrencies. When it comes to darknet users, however, cryptocurrencies remain incredibly appealing.

On paper, that may seem like a small problem, but the reality is very different. Even this ‘minor’ percentage represents close to $5 billion in revenue being laundered by criminals. That is a very large amount of money, although most laundering still takes place through other financial means. Which other methods are popular in this regard remains a bit unclear.

Of the money laundered through cryptocurrencies, only 0.3% seems to have passed through crypto-to-crypto exchanges. To most outsiders, that may not seem to make much sense, but criminals are more interested in directly converting their newly-obtained cryptocurrency to fiat currency. Doing so can remove any pseudonymity or privacy associated with their laundering activity, so a more cautious approach might be warranted.

As such, the year 2016 saw illicitly obtained Bitcoins being laundered through Bitcoin exchanges in nearly six out of ten cases. Gambling and mixing services were also incredibly popular in this regard, mainly because all three ecosystems are pretty liquid at any given time. Even so, blockchain analysis firms are closely monitoring these industries these days; thus, relying on any of those methods may prove catastrophic for criminals looking for an easy way out.

Despite the global nature of Bitcoin and other cryptocurrencies, Europe seems to have been a hotbed for laundering cryptocurrencies, at least back in 2016. North America only represents 5.28% of this illegal industry, whereas Asia – mainly due to its very strict laws – represents just 1.21%. Another interesting point is that 36.44% of laundering originated from “unknown jurisdictions”, which seems to indicate that a lot of criminals mask the origin and destination of their funds as best they can.

While these statistics date back to 2016, there’s no reason to think much has changed in the past two years. Cryptocurrencies still remain appealing to criminals, and it seems their money laundering efforts won’t be slowing down anytime soon. Whether or not there will be a stronger focus on using exchanges, the gambling industry, or mixers to convert ‘earnings’ to other financial tools will remain an interesting concept to keep an eye on.

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With every slide in the cryptocurrency market, Bitcoin dominance increases. As a matter of fact, Bitcoin ball park control stands at 40 percent in the last seven days or so. That’s when bears took more than $30 billion despite supportive news from the SEC. Going forward, it could be worse for cryptocurrency portfolios because any break below $6,000 and we might see BTC valuation dropping 85 percent from its ATHs to $3,000. Let’s have a look at these charts: From the News It is attack after attack but in the case of BitGrail, ordinary account holders are set to suffer. A while back, this Italian exchange was hit by hackers who made away with $187 million worth of Nano coin. Even though the operations of the exchange took a hit, they resumed normal services a few days later. However, with formal announcement by the exchange that they were not in a position to reimburse user funds because they strongly believe hackers took advantage of Nano’s blockchain weakness, the Nano Foundation refutes these claims. We have temporarily disabled the BitGrail exchange pending further notice. — BitGrail Exchange (@BitGrail) May 2, 2018 This inevitably means the court is the only center of arbitration and now through the orders of a Florence Court, where bankruptcy petition for BitGrail is on-going, BitGrail’s digital assets are under state custody. We cannot make solid conclusion as the hearing continues. 3000 users of the #BitGrail fiasco have filed a petition asking an Italian court to declare the entities that operated the Bitgrail exchange bankrupt.https://t.co/x3wfor4qe1 — DeusExMachina (@d1rtydan) April 27, 2018 Then again the CEO of BitGrail has been clear that there is nothing since the exchange is following court orders. Regardless, it’s clear that the exchange is in a poor financial situation and probably won’t repay victims. As litigation continues in Italy, authorities in South Korea are planning on creating a special economic zone for blockchain companies in the city of Busan. “We need a place to concentrate on the cryptographic industry in Korea like the Crypto Valley in Switzerland” This comes at the back drop of the country’s initial steps of totally banning ICOs and fostering an environment that isn’t supportive for crypto traders in general. #SouthKorea intends to launch a #blockchain center in Busan city to incubate companies and projects working in the sector. Modeled as “#Crypto Beach,” the development is reportedly inspired by Switzerland’s “Crypto Valley” in Zug.#Bitcoin #btc $btc $bitcoin #ETH #EOS #ICX — Hitman (@Hitman637) June 17, 2018 Because of this, most blockchain start-ups in South Korea offer their ICOs in other countries. So, to prevent loss, the only approach is to thaw their regulatory grip by creating such blockchain friendly zones. Of course, all things constant, this is positive for Bitcoin in the long haul. Bitcoin (BTC) Technical Analysis Weekly Chart Bitcoin Weekly Chart by Trading View Talking of Bitcoin hitting $3,000 may be pessimistic but here is the thing: Any break below $6,000 this week or within the next month and it would be catastrophic for coin holders in general. The web might even spread considering the positive correlation between Bitcoin prices and altcoins as we have been seeing in the last couple of days. Besides, even Trustory CEO thinks BTC prices are yet to bottom out and unwind the effect of Q3 and 4 2017 Tether pump. Price wise, it’s clear that BTC prices are trending around a key inflection point, a double bottom as the weekly chart shows. Overly, bears are in charge and we can draw a simple trend line between Q1 and recent Q2 highs to demonstrate that. In our previous projections, any up-thrust that lifts BTC prices above $8,000 will mean bulls are in charge and buying in line with the new shift of trend is practical. Conversely, it will be a journey back to $3,000 if sellers break below $6,000 as we have mentioned before. Daily Chart Bitcoin Daily Chart by Trading View Announcement by the SEC on June 14 was by all means timely. As we can see from the daily chart, that’s right at the main support line and initial bear targets at $6,500. Now, our trade plan based on these new events proposes buying but only when buyers push prices ideally past $7,000 and for conservatives at $7,800. Of course, with the past three candlesticks moving within tight trading ranges, patience would be an asset and would mean buying only once our trade conditions are met. On the reverse side where sellers drive below $6,000 and it would be a slide to $3,000. The post “Bitcoin (BTC) Prices Yet To Hit Rock Bottom”: Bitcoin (BTC) Technical Analysis (June 18, 2018) appeared first on NewsBTC.

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